DailyPost 2142

Audit is the final stamp on financial discipline and propriety or the lack of it, followed in one procurement or a deal. This is in the backdrop of the scams hitting the nation. In general operations, audit during a given period of any organization gives us a fair idea of the process of financial accountability of the enterprise and how meticulously the financial process and rules are being followed and to what effect. It is third party, constitutional body at times, sitting in judgement, on the given accounting procedures, by hard core professionals, putting in sufficient time and energy, to deliver an Audit Report, that can be etched in stone.

The people and organizations at the receiving end of the Audit Report can possibly break their heads, but will not be able to find any holes in the report. Is that level of finality needed? Can the auditors of various hues and colors deliver that sort of finality? If an analogy has to be provided for the ”Audited,” it would like a judgement of the Supreme Court in any case. Audited means everything cleared in the transactions concerned. Audit objections that too of a humongous type, showing fingers at deliberate financial misconduct can be tumultuous even for a nation. Our recent history stands testimony to it.

If audits are done in a mechanical manner or only as a compliance, private sector inclusive, we might end up in issues like Satyam. The tragedy is what Audit does not unravel, remains unknown for all times to come. Some tectonic / accidental event may take the lid off the camouflage, but by that time it is too late. If accounts, process and financial results are hardcoded, so should be audits too. Changing formulas of calculation, bringing in factors which were not present at the time of the transaction, bringing a notional dimension and not being held accountable for the report, does not augur well for the audit ecosystem of the nation.

Two facts are extremely critical, while the auditor is not accountable for the report, it is touted as the gospel truth, to an extent that it can provide a decisive shift to the polity of the nation. The range of loss, or the change in figures, at different times, has its own issues. Notional and indicative cannot be the language of audit, when the world takes the figures as etched in stone. All the sides are aware of it. Whether market forces operated as they should, under the parameters of the law is something which has to provide for, very effectively. Audit is like a laboratory experiment of facts and figures, taking whatever time necessary, with all documents made available and without any pulls and pressures. Conversely, does it not make mean that auditor has all the evidence, sufficient enough to take it through the court of law.

Sanjay Sahay

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